Jean Coutu sees generics slow Q1 Rx retail sales growth

VARENNES, Quebec — Canada’s Jean Coutu group on Tuesday released the sales and earnings figures from its FY2017 first quarter, which ended May 28. For the quarter, the company saw revenues of $723.6 million — a 1.6% rise over the same quarter last year. The company attributes its sales growth to overall market growth and the expansion of its franchised store network. 

 

“During the first quarter, network retail sales showed an increase despite a very competitive environment and a difficult regulatory context, which demonstrates the effectiveness of our strategies and the strength of our brand,” Jean Coutu group president and CEO François J. Coutu said. “We will continue to make every effort required to reach our objectives and remain a leader in our sector.”

 

Some factors that held back Q1 revenues were an increase in volume in generic drugs and lower prices for generic drugs. The price reductions and new generic introductions reduced the company’s pharmacy  retail sales by 0.4% collectively. Total store prescription growth was 4% and same-store growth hit 3.8% in Q1, while pharmacy retail sales only grew 0.8%. 

 

Besides market pressure, Jean Coutu group attribute a 1.3% reduced growth in pharmacy sales to deductions agreed upon by Quebec’s leading pharmacists organization and its department of social services. 

 

The company’s Pro Doc generics manufacturing arm saw gross sales of $51.5 million for the quarter, up from $50.3 million for the same period last year, contributing $21.3 million to the company’s consolidated operating income before amortization — contributing about 41.4% as a percentage of gross sales. The company’s total OIBA decreased by $6 million to $77 million in the quarter. 

The company posted a net profit of $49 million, or $0.27 per share.